Diasporan remittances could fund Africa's industrialisation

Remittances from the diaspora are one of the sources officials are considering for the financing of Africa’s industrialisation.

An issues paper presented at the 2013 Joint African Union-Economic Commission for Africa (ECA) Joint Meeting in Abidjan indicated that remittances have recently become a very important source of external financing.

According to the paper, Africa’s remittances must be leveraged for the continent’s industrialisation.

But Dr Maxwell Mkwezalamba, the AU’s Commissioner for Economic Affairs, told the press that there is no clear public policy on how to engage the diaspora in Africa’s industrialisation.

The issue paper titled “Industrialisation for an emerging Africa”, however, noted that African governments and the AU are “in the process of engaging the diaspora”.

The document said African countries and the African Development Bank (AfDB) have been prompted to put in place mechanisms to facilitate African diaspora investments efforts.

It explains that the objective is to have a platform to leverage diaspora resources, including finance for investment in the industrial sector.

A World Bank report in 2011 indicated that Africa recorded high inflows of remittances to the tune of $40 billion from African migrants living outside their respective countries in 2010.

Titled “Leveraging Migration for Africa: Remittances, Skills, and Investments”, the report which was released on March 30, 2011, says remittances were the continent’s largest source of net foreign inflows after foreign direct investment (FDI).

Remittances are moneys sent by nationals living outside their country back home to their households in their country.

Apart from the financial resources from the diaspora, Dr Mkwezalamba stated that their human resources were also needed.

“We can take advantage of the skills that exist in the diaspora,” Dr Mkwezalamba said indicating how the diaspora is key to Africa’s industrialization. “We need to bring them on board,” he added.

African countries have also been advised over the years to start issuing diaspora bonds to fund infrastructural development.

By Ekow Quandzie in Abidjan, Ivory Coast